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Have you heard of ? The bill was passed by the State Senate in May and by the Health Committee of the State Assembly on June 28, 2017.

It is likely to become law soon.

The bill, sponsored by State Senator Mike McGuire, would prevent payments from drug companies to physicians to encourage the preferential prescribing of drugs. The bill refers to these transactions as "gifts." The legislation defines "gifts" as "payment, food, entertainment, travel, subscription, advance, service, or anything else of value provided at no cost or less than full market value to a health care provider." "Gifts" are presumably provided by drug manufacturers to influence physician prescribing.

Pharmaceutical companies have lobbied against the bill. Practitioners have complained that it constitutes government interference in professional communications and medical practice. Others claim it will prohibit the physician participation in clinical trials or prevent consulting arrangements that promote innovation. If you read the bill, that is not its intent.

So what is the problem? The bill will not deliver on its promises.

The Claim

According to Senator McGuire, "California physicians and medical professionals lead the nation in the number of gifts taken, over $1.4 billion in 2014. SB 790 will curb financial payments, gifts and incentives to medical professionals and help drive down the skyrocketing costs of prescription drugs for millions in California."

Wow! Really? Pharmaceutical companies paid $1.4 billion in incentives to California physicians to induce the unnecessary prescribing of expensive new drugs? I do not think so.

Most of the $1.4 billion is related to research grants to institutions, royalties for innovation, consulting fees for scientific and medical advice, and educational programs -- all of which would still be allowed under the new bill.

How much of the $1.4 billion falls into the category of "gifts"? I doubt that the sum is large. Pharmaceutical companies are not paying $1.4 billion to bribe physicians in the Golden State -- despite its nickname.

Nevertheless, according to Senator McGuire, "this bill is all about protecting patients, taxpayers and driving down the costs of prescription drugs."

The Reality

Not quite. The intent of SB 790 is not to reduce the cost of expensive new drugs; its purpose is to reduce the prescribing of expensive new drugs.

SB 790 is motivated by studies that suggest a relationship between the receipt of money from pharmaceutical companies and the prescribing of high-priced medications. But why is there a relationship? Are physicians are being influenced?

Perhaps, but there is a better explanation. Physicians will prescribe expensive new drugs if they have had a favorable experience with them and know that they work. Such physicians are likely to have been involved in research studies or as consultants during the drug's development. They prescribe the medications because they want to provide the best treatments for their patients.

So knowledgeable physicians who want to help patients will still prescribe new expensive drugs because of their benefits. Since some of them are very qualified, they will continue to serve as researchers and consultants to industry, and thus, will have financial connections with pharmaceutical companies. SB 790 will not change any of this.

Interestingly, SB 790 covers only relationships between physicians and drug companies. Physicians who receive money from device companies are not affected by the bill.

I am sure that the legislators in California think that they are doing the right thing. If physicians are being influenced, SB 790 targets a real problem.

But if voters believe that this bill will reduce healthcare costs or will reduce payments to physicians to a meaningful degree, they will be very disappointed.

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